Transport and logistics provider Gefco has opened a £10m ($13.2m) warehouse and sequencing centre in Speke near Liverpool, in the UK which is currently supplying components to Jaguar Land Rover’s plant in nearby Halewood. At an event held to mark the opening last week Gefco executives talked about the latest technology being used at the facility, and discussed the company’s strategy and support for customers at a time of uncertainty for the automotive industry in the UK.
The 12,000 sq.m greenfield facility is currently handling parts for two companies supplying components to Halewood – Delphi Automotive and Yazaki. However, Gefco has built the facility to provide services for all of its OEM and tier supplier customers in the region, according to Zsolt Vecsera, managing director of Gefco UK, and discussions are underway as the logistics provider looks to expand into phase two of services from the facility.
Delphi Automotive, is supplying wiring harnesses and Gefco is receiving, storing and delivering them on an hourly just-in-sequence (JIS) basis to the plant over 24 hours. The wiring harnesses are shipped in from Delphi’s plant in Morocco with deliveries arriving between four and five times daily.
Each harness, or KSK (customised cable harness), is designed and supplied specific to a given vehicle identification number (VIN) and covers exactly all the required electrical features of the car. This means that Gefco has to ensure the sequenced harness matches exactly the car to which it is being supplied when it reaches the assembly line.
“What our system does when the data [on the vehicle launch] comes in is create a virtual stillage in the system and allocates the correct identifier for that unique harness to the stillage in the right sequence,” explained Craig Allen, WHS regional general manager at Gefco UK.
The harnesses are loaded into nine-unit stillages and error-proofed using a three-point scan on each KSK. “Our WMS has got a complex level of error proofing to ensure we are 100% right first time,” said Allen. “Only when [the harnesses] are all correct will the WMS produce the shipping document that allows us to send them to the plant.”
The Speke facility has 12 loading bays and a 50-metre deep yard area. It is also home to Gefco’s GefBox consolidation centre, which provides a buffer to the loop of reusable containers used by the OEMs and tier suppliers in the region. Gefco has been managing the supply of packaging units to JLR since 2014.
Certified for the future
The new facility is also AEO certified, along with Gefco’s 17 other sites in the UK. AEO (Authorised Economic Operator) certification is an internationally recognised quality mark indicating that a company’s supply chain is secure, and that its customs controls and procedures are efficient and compliant. Having this status puts Gefco in a good position post Brexit, according to its commercial director, John Stocker.
“We have full AEO accreditation both here and across the UK business and the work that has been put in to gain this will stand Gefco in very good stead once the picture becomes clearer; as we know it is quite opaque at the moment,” said Stocker.
What might be surprising is that the number of third party logistics (3PL) providers in the UK with AEO accreditation are few and Gefco is at an advantage having it. As professor Alan Braithwaite explained at last week’s Automotive Logistics UK conference, there are only 600 companies that are AEO registered in the UK, whereas in Germany for example, the figure is in the thousands. “Everybody needs to have the certified compliance but 85% of UK businesses fail on the first application,” said Braithwaite.
Gefco also has a strong standing in customs regulation, which its executive vice president for the European and Middle East regions, Pierre-Jean Lorrain, said was another advantage.
“It is clear that for our customers [Brexit] may add additional constraints and consequently additional lead time, and the request-for-order may be a bit longer, but we can manage that,” he said. “And if we look at customs there are opportunities for Gefco; customs regulation is one of the sectors in which we are very strong.”
As with the flexibility designed into the new facility in Speke, which allows for multiple goods handling, Gefco’s international AEO accreditation and customs expertise puts it in a good position to react to whatever changes in the market Brexit will bring.
“One of the strong points in the Gefco DNA for automotive is crisis and event management,” said Philippe Doyer, executive vice-president – overland, warehousing and reusable packaging at Gefco. “We are quite confident that what exactly will happen is unknown to everybody but we will be able to adapt and we are in a strong position to do so for our customers.”
Two thirds of Gefco’s business is dedicated to the automotive sector, with rest divided between other sectors including industrial, retail, aerospace and electronics. Zsolt Vecsera said that business split would also stand it in good stead as the prospects for the business became clearer.
“We want to adapt to the market and maintain a good standing in other industries as well, which gives us a good understanding of logistics challenges that other industries are facing,” said Vecsera. “We can adopt the knowhow from them to automotive logistics and vice versa [to help deal with] the automotive challenges we face with our customers.”
Those challenges were not exclusively related to Brexit, however, and Lorrain went on to explain that new trends in mobility and shared ownership would also have a big impact on its business.
“Tomorrow, with new mobility, we will not buy a car,” he said. “We as a supplier in the automotive business have to adapt our model to this change, which is major to our industry. But we consider that with these changes there are opportunities for new business.”
Lorrain said that future urban-based mobility trends would see customers ordering vehicles to their homes to use on a short-term basis and dropping them off elsewhere.
“Who will deliver this car, and then collect, clean and repair it for the next customer?” asked Lorrain. “This kind of major evolution will generate huge changes in our business model and we will have to get ready for that.”
Stay posted for further discussion of Gefco’s business strategy in the UK